Letter From The CEO

January 2014
Dear Fellow Shareholders,

The New Year is here and we are off to a great start with the recent announcement of our collaboration with a major global pharmaceutical company for the use of our EP-AD Alzheimer’s disease diagnostic assay in clinical trials.

Our business strategy is to complete early stage research related to diseases associated with misfolded proteins, and then, once proof of concept is established, to form partnerships and strategic alliances with companies that have the resources and expertise to bring our products through clinical development and into the market as quickly and efficiently as possible. I would characterize this year as the “Year of Business Development” for Amorfix as we are poised to complete several new partnerships and alliances throughout 2014. This strategy offers the benefits of sharing the risks, development costs and eventual profits from products that make it to the market.

We have been very successful with developing good partnerships with industry and academic leaders in order to advance and expand our product pipeline. Our ALS antibody therapeutic program was licensed to Biogen Idec., a company committed to improving existing treatments for ALS. In addition, we have a collaboration with MD Anderson Cancer Center, one of the world’s most respected centers devoted exclusively to cancer patient care, research, education and prevention. It is ranked as the top hospital in the United States for cancer care in 2012 and has held this ranking nine times in the past 11 years. Amorfix will supply its expertise and ProMIS™ discovery technology tools while MD Anderson will supply its expertise and capabilities in cancer to identify new targets for the development of therapeutics for the treatment of lung cancer. Our partnerships with Cangene, Epitomics and others represent similar arrangements that will result in the generation of novel therapeutics for the diagnosis and treatment of human disease.

Our novel approach to identifying cancer targets continues to gain attention among pharmaceutical industry scientists and the academic research community. Our proprietary ProMIS™ technology is an innovative approach to identify novel disease specific epitopes on misfolded or partially unfolded proteins for the generation of targeted therapeutics that only bind to and kill tumors but do not affect normal cells. In this way, we are creating therapeutics that should have much better tumor killing activity with few or no adverse side effects. We were invited to present our research at the prestigious AACR meeting.

The AACR is the oldest and largest scientific organization in the world focused on high-quality, innovative cancer research. Their annual conference, attended by over 17,000 participants, is the premier forum in North American for presentation and discussion of cancer research with representatives from leading academic and pharmaceutical companies. Being selected to provide an oral presentation at this event is a validation of our innovative technology and the potential it has for the development of safer and more effective treatment.

The ultimate success of our business depends greatly on the science behind our programs. Our cancer therapeutic antibody programs represent a combination of cutting edge science and applied research to develop targeted therapeutics. It is well established that protein misfolding is a central pathological event in many fatal neurodegenerative diseases including Alzheimer's disease, Parkinson's disease, and amyotrophic lateral sclerosis. Recently, intriguing evidence for a role of misfolded proteins in cancer has been identified and Amorfix is leading the way. Studies in our laboratories and others have now confirmed this hypothesis. The focus on misfolded proteins represents an entirely new approach to the identification of cancer targets and enables the development of very selective therapeutics offering greater efficacy and less toxicity.

We have completed the proof of concept studies for our ovarian cancer antibody program. The results showed that treatment with the antibody-urease conjugate, developed in collaboration with Helix Biopharma, reduced tumor volume in mice compared to controls and tracked closely with taxotere, the reference standard used in this cancer model. Our recent announcement describing an intriguing discovery that treatment of cancer cells with standard chemotherapeutic agents currently used to treat ovarian cancer patients increases the cell surface expression of misfolded PrP protein (our lead ovarian cancer therapeutic) is a remarkable finding that has profound implications for our cancer therapeutic programs. It suggests that combining our ovarian cancer antibody together with a standard chemotherapy regimen will have a much greater therapeutic effect compared to when given alone. We are in the planning stages for conducting this type of study in animal models. Ovarian cancer represents another area of high unmet medical need and a large market opportunity for our Company.

On the diagnostic front, we now have a partnership with a major pharmaceutical company to optimize, validate and use our Alzheimer’s disease diagnostic in clinical trials. This represents an important step in the process of bringing this important diagnostic tool to a point where it can first be used as a way to identify early-stage Alzheimer’s disease patients for enrollment in clinical trials and eventually as a diagnostic used by practicing neurologists to accurately diagnose patients showing early signs of cognitive impairment and dysfunction. In addition, our diagnostic assay represents a way to measure aggregated Abeta in cerebrospinal fluid as a biomarker to assess the effectiveness of experimental treatments for Alzheimer’s disease. Our plan is to offer the diagnostic test to other pharmaceutical companies developing Alzheimer’s disease therapeutics as a way to identify early-stage patients for entry into clinical trials and to accelerate the development of better treatments for this devastating disease.

We continue to make steady progress on the development of a simple blood test for ALS. This is something that is desperately needed as currently there is no simple way to diagnose this killer disease, particularly at an early stage. In some cases it can take up to a year or more before patients are diagnosed with ALS. Our test will be a simple blood screening assay that detects the presence of misfolded SOD1 in the plasma with results available in just a few days. Our preliminary data have demonstrated that we can detect this molecule in the plasma of patients diagnosed with ALS while it is not present in the plasma of normal subjects. This test has the potential to revolutionize the way ALS is diagnosed.

Our business goals for this year are to continue to advance our cancer therapeutic programs through preclinical development, establish new business deals and strategic alliances for development and commercialization of our diagnostic and therapeutic programs and continue to bring innovative projects into our growing product pipeline. Strategic alliances with big pharmaceutical companies will assist in advancing our programs through development and commercialization and bring in non-dilutive revenue to the company.

These are exciting times for our Company. We will continue to make good, steady progress on all fronts and executing our business strategy within the funding envelope available. I see great things ahead for our Company and our shareholders.

Thank you for your continued support in Amorfix Life Sciences.

Sincerely,

Robert Gundel, PhD, MBA
President and CEO